USD/CAD – Canadian dollar at 1-week high, U.S. inflation next

USD/CAD is unchanged in the Wednesday session. Currently, the pair is trading at 1.3243, up 0.05% on the day. On the release front, there are no Canadian events until Thursday. In the U.S., the markets are expecting soft numbers from consumer inflation. CPI and Core CPI are forecast to post gains of 0.1% and 0.2%, respectively. On Thursday, the U.S. publishes retail sales and PPI.

The Canadian dollar is sensitive to the mood of investors, and positive news on Tuesday could bode well for the currency. In the U.S., lawmakers have tentatively agreed on a proposal which will avert another government shutdown, which would take effect on Friday. However, the deal needs to be approved by Congress and President Trump. The agreement does not provide Trump will funding for a border wall, and the deadlock between Congress and Trump over this issue triggered a government shutdown in January which lasted 35 days. Both sides are eager to avoid blame for a second shutdown, and Trump hinted earlier in the week that he would go along with the deal, albeit with reservations.

Taking a page out of the Federal Reserve’s playbook, the Bank of Canada has become more dovish, after raising rates three times in 2018. The BoC is expected to stay on the sidelines at its next policy meeting in March 6. The Canadian economy is being hampered by the global trade war, which has reduced the demand for Canadian exports. Weak oil prices have also weighed on the economy and kept inflation at low levels. The Canadian dollar is under pressure, and has lost close to 1.0% in February.

Risk appetite very much improved

Kiwi surges on less-dovish RBNZ

U.S Dollar under pressure

USD/CAD Fundamentals

Wednesday (February 13)

  • 8:30 US CPI. Estimate 0.1%
  • 8:30 US Core CPI. Estimate 0.2%
  • 10:30 US Crude Oil Inventories. Estimate 2.1M
  • 14:00 US Federal Budget Balance. Estimate -10.5B

Thursday (February 14)

  • 8:30 US Core Retail Sales. Estimate 0.0%
  • 8:30 US Retail Sales. Estimate 0.1%
  • 8:30 US PPI. Estimate 0.1%
  • 8:30 US Core PPI. Estimate 0.2%
  • 8:30 US Unemployment Claims. Estimate 225K

*All release times are EST

*Key events are in bold

USD/CAD for Wednesday, February 13, 2019

USD/CAD, February 13 at 8:15 EST

Open: 1.3236 High: 1.3241 Low: 1.3196 Close: 1.3243

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.3049 1.3125 1.3200 1.3290 1.3383 1.3445

USD/CAD posted slight losses in the Asian session but has recovered in European trade

  • 1.3200 was tested earlier in support
  • 1.3290 is the next resistance line
  • Current range: 1.3200 to 1.3290

Further levels in both directions:

  • Below: 1.3200, 1.3125 and 1.3049
  • Above: 1.3290, 1.3383, 1.3445 and 1.3547

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.